EnQuest in talks to reduce Kraken oil project stake

North Sea oil producer EnQuest is in talks to sell a 20 per cent stake in the huge Kraken project east of Shetland.

EnQuest could sell a 20% stake in the huge Kraken oil field. Picture: Contributed

If the deal goes ahead, Israeli conglomerate Delek would advance the firm $20 million (£15.1m) for up to five years, at an annual interest rate of 3 per cent.

This would be paid back by EnQuest if Delek’s costs were not covered within five years by revenues flowing from the development, which is expected to deliver its first oil in the first half of next year.

EnQuest stressed that there was no guarantee of a final agreement being reached on the deal, which would also need the consent of its lenders.

It added: “EnQuest continues to closely monitor and manage its funding and liquidity position in light of the current market environment and is engaging as appropriate with its credit facility providers.”

In February, EnQuest upped its stake in Kraken to 70.5 per cent after buying an additional 10.5 per cent previously held by collapsed explorer First Oil. The remaining interest in the field, which is estimated to contain about 140 million barrels of oil, is held by Edinburgh-based Cairn Energy.